‘Maturation’ of private credit asset class may cause shake-out: PGIM chief

PRIVATE clients’ “voracious” demand for private or unlisted debt is likely to underpin demand for the asset class, said PGIM president and chief executive David Hunt. But the sector is undergoing a “maturation” process which may cause a shake-out.

“Private credit draws a lot of capital and new competitors. All that gets ahead of its skis and we do have a bit of a shake-out. But the underlying trend of institutions and, increasingly, high-net-worth investors (HNWI) having private credit in their portfolios will continue to grow...

“I do think there is a process of maturation. Many people who, two to three years ago, set up shop are actually having a hard time raising money now. If we have a credit cycle, it may cause a shake-out.”